Question

Look at this monthly budget.

Monthly Budget
A 3-column table has 9 rows. The first column has entries net income, total income, rent, bus pass, total fixed, food, discretionary, total variable, savings. The second column is labeled Budgeted with entries (in dollars) 400, 400, negative 200, negative 20, negative 220, negative 75, negative 30, negative 105, 75. The third column is labeled actual (in dollars) with entries 375, 375, negative 200, negative 20, negative 220, negative 125, negative 50, negative 175, negative 20.

What is the simplest change that can be made to the budget to produce more savings next month?

Add to fixed expenses.
Decrease food expenses.
Reduce rent payments.
Increase total income.

Answer 1

Decrease food expenses.

Food is a variable item and is $50 over budget (actual $125 vs budget $75). Cutting food back to the budgeted level would raise savings (from -$20 to $30). The other options are either harder or would lower savings.